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I'm usually pretty pro-business, but it just seems... inappropriate? to not have some kind of additional tax or levy on "record profits" in the context of the e
by desro 3y ago
I'm usually pretty pro-business, but it just seems... inappropriate? to not have some kind of additional tax or levy on "record profits" in the context of the existential threats fossil-fuel driven climate change presents. I know the oil industry is so much more than "gas" for the cars and planes — industrial chemistry and plastics are obviously highly dependent on petrochemicals — but. I wish I had more of a point here than to say "something feels off."
- voisin 3y agoThese profits only exist because externalities aren’t being internalized. So no, you are not wrong whatsoever - something is very much off.
- memen 3y agoCould you elaborate on what externalities and how they are not internalized? Am curious.
- mjhay 3y agoThere's this thing called "climate change" that's been associated with fossil fuels. If these related externalities were internalized, Exxon would be bankrupted many, many, many times over.
- dantheman 3y agoWhy wouldn't the users of the product pay?
- yarg 3y agoIt's not just what happens when you burn it, they spill that shit with impunity. https://www.google.com/search?q=niger+delta+oil&tbm=isch https://www.google.com/search?q=niger+delta+oil&tbm=isch
- voisin 3y agoWho (consumer or producers) ultimately shoulders the burden of a tax (in this case, a carbon tax to internalize the externalities I referred to) depends on the price elasticity of demand. If consumers are relatively price inelastic, then they'll shoulder the cost of the tax. If consumers are relatively price elastic (sensitive), then they (at the margins) switch to alternatives and then the producers ultimately pay via lower volumes and tighter profit margins. I think we are seeing what happens when oil increases significantly for a prolonged period - emergence of EVs, switch to heat pumps, etc. etc.
- mjhay 3y agoThen Exxon would go bankrupt by the demand cratering to zero. It's the same result either way.
- ZeroGravitas 3y agoTheir usual profits are due to unpriced externalities, but these specific profits are probably windfall profits due to the War in Ukraine. edit: one of the related stories goes in depth on this: "Why are BP, Shell, and other oil giants making so much money right now?” https://www.bbc.co.uk/news/business-64583982 https://www.bbc.co.uk/news/business-64583982
- toomuchtodo 3y agoWindfall tax and ship the proceeds to Ukraine? Otherwise, these profits are coming out of nation state budgets for Ukraine military support while O&G captures the profits of the commodity volatility caused by the conflict.
- hnburnsy 3y agoFor 2020 ExxonMobil lost $22 billion.
- hnburnsy 3y agoAnd that 11.4B profit was on revenue of 86.5B, a profit margin of 13%. Is a 13% profit unreasonable?